EU trade figures for February will be published on April 17. In the meantime, the latest data from Germany’s Federal Statistical Office already send a clear message. Germany’s deficit with China alone is larger than its combined surpluses with the U.S. and the UK. The U.S. and the UK remain profitable export markets for Germany. China, by contrast, looks much more like a source of imports than a market able to absorb German exports on anything like the same scale. Any serious loss of traction in the U.S. market would therefore be very painful.
Trading with China does not mean the same thing in both directions. Importing from China is spread across a much broader range of EU companies. Large firms still account for the biggest share, but small and medium-sized companies also play a visible role.
Exporting to China is very different. There, the business is dominated by large firms. Companies with 250 employees or more account for more than four-fifths of EU exports to China, while the smallest firms barely register.
China is a supplier for many EU companies, but a customer only for the biggest ones. That matters for policymakers.
Last week, we noted that the EU’s apparent strength in the pharmaceutical supply chain could be misleading if China’s role in intermediate stages was left out of the picture. Now the EU’s own official foreign and security policy think tank drives home the same point. Its stress test on active pharmaceutical ingredients deemed essential for healthcare finds that, in more than one-third of the cases examined, the share of Chinese suppliers and production sites is so large that any disruption in supplies from China would have severe consequences. The dependency is especially acute in antibiotics, as our graph shows.
To our knowledge, Orbán never made the Hungary–China trade deficit a central public issue. His line was different: stay close to Beijing, attract Chinese capital, and hope that political goodwill would lift Hungarian exports. It did not work out that way. Over 2016–2025, Hungary’s imports from China grew, on average, about 10 percentage points faster per year than its exports to China.
At the time of writing, Viktor Orbán appears to have lost the election and be set to leave power after 16 years in office.
Spain’s prime minister is in China, where Pedro Sánchez is due to meet Xi Jinping and Li Qiang. Spain’s huge trade deficit with China will no doubt be on the agenda. Last year, that deficit was three times larger than when Xi came to power. Over the five years since COVID, it has averaged an unsustainable €82 million a day. In 2025, for every euro Spain exported to China, it imported five from China.
EU beekeepers keep sounding the alarm. As recently as March 2026, Swedish beekeepers warned that sugar adulteration was widespread and that most of the honey imported into Sweden was fake.
“Most of it comes from factories in China, where it is processed and then shipped to Europe, where it is mixed and sold as honey,” said a representative of the Swedish Professional Beekeepers’ Association.
In 2025, the EU imported 66 thousand tonnes of honey from China, compared with 37 thousand tonnes in 2020. That is equivalent to compound annual growth of just over 12%.
Yes, Eurostat is supposed to publish neutral statistics. But it is still remarkable that, on a trade relationship this strategic, the European Commission’s visible public output amounts to little more than a copy-paste of the data.
The spike reflects China’s rush to build or secure roll-on/roll-off vessel capacity for its car-export machine. These ships are designed to carry vehicles that can be driven on and off the vessel.
Readers may ask why they count as exports if they are built in China and used to transport Chinese cars. The reason is that trade statistics follow the legal sale and delivery, not the economic nationality of the wider supply chain. In shipping, ownership, operation and flag often diverge. A roll-on/roll-off vessel built in China can therefore be exported on paper because it is delivered to a foreign-registered owner or offshore leasing structure, even if it ends up serving Chinese vehicle exports.
For years, Chinese media have highlighted the faster growth of general trade relative to processing trade. In early 2026, they also pointed to the more than 17% rise in imports in January-February to help defend China’s brutal trade surplus. What they conveniently left out is that general trade imports rose by only 6.5%, while processing trade imports jumped 35%.
In other words, despite the rhetoric, Beijing still wants processing trade alive and kicking. The newly approved 5-Year Plan makes that clear in Chapter 22.
General trade accounted for 62% of total imports in January-February 2025. This year, that share fell to 57%.
A good proxy for China’s overseas projects is the volume of exports tied to contracted projects abroad. Our forecast is that these exports will surpass $25 billion in 2026, led by steel structures, photovoltaic and wind equipment, offshore platforms, and dredgers.
What surprises us is the near-complete silence, in both Kazakhstan and China, over transactions early this year totalling almost 16 tonnes of gold. Shipments of that scale would normally be expected to attract at least some public comment. Here, they seem to have passed with almost none.
That silence is all the more notable because, since October last year, Zijin Mining, a Chinese group ultimately controlled by the state, has owned 100% of Kazakhstan’s Raygorodok gold mine.
Industry reports suggest China may be moving to restrict sulfuric acid exports, though there is still no official confirmation. If true, the consequences would go beyond fertilisers. Tighter Chinese exports could squeeze copper producers elsewhere, above all in Chile. For the EU, the immediate exposure appears limited: its main external suppliers are Serbia, which accounts for 59% of imports, and Norway, with 24%.
Sulfuric acid use is often seen as a rough barometer of both fertiliser demand and industrial activity.
China-bound tanker rates signal worry, not panic. Strait of Hormuz tensions clearly matter, but the index suggests freight markets are pricing heightened risk rather than imminent paralysis. Rates remained very elevated by historical standards, yet by April 10 the panic was not escalating further. Chinese independent refiners appear to be buying Iranian oil at a premium to Brent. For the full picture on China’s freight indices, visit the Shanghai Shipping Exchange.
Using the revised Q1 2025 GDP figure, we estimate Q1 2026 nominal GDP at around 33.5 trillion yuan, consistent with real GDP growth of 5.1% and an implied GDP deflator of 0.2%. Official results are due on April 16.